The Australian Competition and Consumer Commission has initiated proceedings in the Federal Court against online tradie marketplace ServiceSeeking for engaging in misleading conduct in relation to customer reviews, which included a feature allowing companies to pick their own ratings.

ServiceSeeking is a Sydney-based online platform where tradespeople can quote and book jobs posted by consumers from plumbing to pest control. The website works in a similar fashion to Airtasker, but with a narrower focus on services and trades.

The Australian Financial Review first reported concerns about reviews on ServiceSeeking in March, after being alerted to a particular feature called Fast Feedback, which has been active since mid-2016.

5-stars from me: The competition regulator is taking ServiceSeeking to task over misleading customer reviews, which let tradies rate their own work. wavebreakmedia

The feature allows tradespeople to give themselves a rating and fill in comments from a pre-selected list of options, such as "job was completed on time and on budget to a professional standard".

ServiceSeeking then emails the customer the self-assessment and publishes it as a review unless told not to do so within three days.

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In November 2013, the ACCC published guidance concerning online reviews, which stated that "the writing of reviews by a business about itself as though it were a consumer is misleading".

ACCC deputy chair Delia Rickard said the Fast Feedback mechanism was problematic because it gives consumers the impression reviews are genuinely from other consumers.

She said the majority of consumers did not reply to Fast Feedback emails from ServiceSeeking, and that out of 18,000 reviews, around 16,000 had defaulted to whatever the service provider self-assessed.

"Consumers put a lot of confidence in online reviews, which is why the ACCC is doing a lot of work around this issue," Ms Rickard said.

The ACCC is seeking an injunction against the use of the Fast Feedback feature and for ServiceSeeking to adopt an Australian Consumer Law compliance program.

If ServiceSeeking was to be found in breach of the law, financial penalties of up to $1.1 million per offence could apply, although in the case of multiple breaches, the court would examine the totality of conduct in determining civil penalties.

Section 18 of the Australian Consumer Law prohibits a person in trade or commerce engaging in conduct that is misleading or deceptive.

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Section 34 meanwhile prohibits a person from engaging "in conduct that is liable to mislead the public" about the nature, suitability or quantity of any services, which can include online reviewing that allows businesses and service providers the ability to game the system.

ServiceSeeking lets customers and tradespeople connect online, with its customer reviews highlighted as an important feature.

He declined to comment further whilst the case is still before the court.

ACCC deputy chairwoman Delia Rickard said the majority of consumers did not reply to Fast Feedback emails from ServiceSeeking, and that out of 18,000 reviews, around 16,000 had defaulted to whatever the service provider self-assessed.